Hydraulic Fracturing

Visiting with a colleague recently, she shared that these uncertain times in our workplace, in our communities, and in the larger world around us require that we ask ourselves what we really are about.

For the past several days, nearly 350 practitioners, academics, and Extension professionals came together to share and learn and discuss how we can make a difference within the various communities we serve in the first-ever joint conference with NACDEP and the Community Development Society (CDS).

Big Sky, Montana, provided the conference venue for over 130 concurrent session presentations, 40 poster presentations and 3 IGNITE presentations. Five keynote presentations were included along with 8 mobile learning workshops focused on culture, local food, leadership and collaborative partnerships for economic development.

June conference surprise

Among the presentations were ten involving a dozen of Ohio’s Extension professionals. Topics and presenters (including those involving out of state collaborators indicated with an *) are listed below:

Maximizing the Gains of Old and New Energy Development for America’s Rural Communities (Eric Romich, David Civittolo & Nancy Bowen)

Partnering for Community Health (Becky Nesbitt)

Exploring ways of using Community Arts, Cultural and Heritage businesses to stimulate Rural Community Economic Development (Godwin Apaliyah & Ken Martin)

Using Farmers Markets as a Tool for Economic Development: Increasing Healthy Food Access While Benefiting Small to Mid-Sized Farms (Amanda Osborne)

A Dialogue Prompt for Housing and Land Use Policy in a New Administration (poster) (Anna Haines* & Myra Moss)

Three Ohioans were also installed as officers on the national NACDEP board: Nancy Bowen (re-elected Treasurer), David Civittolo (elected President-elect), and Brian Raison (elected north-central region Representative).

Two OSUE NACDEP members were also recognized with national and regional awards. Raison received regional and national recognition for using educational technology in developing ‘A Virtual Farm Market Pilot’ and creating materials for ‘Top 10 Ways to Improve Online Teaching and Learning.’ He received regional recognition in the category ‘Excellence in CD Work’ for his effort, ‘Establishing an Impactful Local Food Council.’ Romich received regional recognition (honorable mention) in the category ‘Distinguished Career.’

Sunrise over Big Sky

Leadership, teamwork and collaboration were celebrated and cultivated throughout the conference. And after a very moving final keynote address by Sarah Calhoun of Red Ants Pants, we were reminded again that working together we truly can move mountains. See you next year in Cleveland, June 10-13!

Greg Davis is a Professor and Assistant Director for OSU Extension Community Development.

The recent technological advancement in horizontal hydraulic fracturing has unlocked oil and gas resources from shale formations once thought to be uneconomical to recover. According to an article by the U.S. DOE Energy Information Administration, “As a result of growth in production, domestic production is soon expected to surpass domestic consumption of natural gas, and by 2018 the United States becomes a net exporter of natural gas for the first time since the 1950s.”[1] Ohio is a major contributor to domestic oil and gas development as intense production from the Marcellus and Utica Shale formations continue to expand.

At the local level, oil and gas development can create a boomtown scenario for communities who experience an increase in population, wealth and economic activity due to the sudden shock. Energy-based economies often experience a boom-bust cycle that follows the rise and fall of energy prices. A high performing energy sector often crowds out other sectors from additional growth, promoting a highly specialized regional economy that is dependent on the performance of the energy sector. This contributes to the volatility of the local economy by limiting economic diversification, and thereby impacting long-term economic growth.

OSU Extension has collaborated with faculty researchers in OSU’s department of Agricultural, Environmental, and Development Economics and the School of Environment and Natural Resources to develop resources that explain how oil and gas development can affect the social, economic, and environmental fabric of a community. A recently published fact sheet series titled, “Shale Energy Development Economic Impact Analysis” is based on the original research from the project “Maximizing the Gains of Old and New Energy Development for America’s Rural Communities.” The materials summarize the project’s research to inform the reader of economic impacts related to energy development.

Readers are provided a background on energy development in Ohio, an investigation into the structural changes that local economies experience when faced with oil and gas development, and planning strategies that interested community stakeholders can employ to nurture long-term community vitality.

What communities in Ohio feel the most significant impact of new energy development? Rural communities with relatively low population density and little economic and social diversification experience the most significant effect according to research. Such communities are exposed to the long-term economic fluctuations experienced by natural resource dependent economies. They cannot easily absorb change and the development that has been associated with challenges related to social and family services, agriculture and land issues, and community infrastructure. How can we help? We can focus on increasing community capacity and enhancing education and training.

How is Extension part of Energy Education?

The decision-making phase of energy development can involve conflict and misinformation. Extension professionals in Ohio have provided research-based information to allow stakeholders and landowners to make informed decisions. Many times controversies centered on energy development are emotionally charged and often influenced as much by values, beliefs and social interaction as by dollars. By combining Extension’s wide expertise into one program, all types of stakeholders can be more effectively engaged.

How do Extension professionals work collaboratively?

OSU Extension has the ability to provide multi-disciplinary programming to inform landowners, stakeholders and interested community members about the social dimensions, economic issues and landowner issues associated with sudden energy development. The key to such efforts: working with stakeholders to design audience-specific programs. Multiple engagement methods are used as well as the formation of energy committees specific to certain topics to facilitate co-discovery efforts.

More information about Extension program areas working jointly on a common topic is available by contacting bond.227@osu.edu.

Communities and individuals across Ohio are being impacted daily by the Energy Boom – through shale horizontal drilling, related business growth, and the development of pipelines crisscrossing all parts of the state. Energy companies are approaching landowners to lease their land or purchase pipeline rights of way. Community leaders are experiencing an influx of workers and their families, impacting roads, social services, housing and schools.

As Extension professionals, we are increasingly asked by our community leaders and residents to help them understand and address the impacts of energy development. By attending this workshop, you will come away with an understanding of the future of energy development in Ohio, anticipated impacts on our communities, and resources available to help leaders and residents address their concerns.

The past four years have seen a world of change in eastern Ohio. With the ongoing development of oil and gas in the region, some of the most historically impoverished counties in the region and the state have begun to experience a significant increase in investment. The corridor stretching from Carroll County to Noble County is the prime development area with 83% of the Utica/Point Pleasant drilling permits issues by ODNR in this six-county region (as of April 25, 2015 – Carroll, Harrison, Belmont, Guernsey, Monroe and Noble).

The recent decrease in oil prices and current low cost of natural gas is cause for concern with local residents and leaders who are hoping for a continued drilling boom. However, even with a potential drop in drilling, the region is likely to see a continued short-term increase in production as midstream infrastructure and pipelines continue to come online.

The drilling activity has been occurring long enough to see some patterns in a variety of local/regional governmental receipts. Consider the following statistics concerning Noble County and the six surrounding counties (Morgan, Muskingum, Guernsey, Belmont, Monroe and Washington).

Lodging Tax:

Lodging tax receipts in the region increased from $1.8M in 2010 to $2.9M in 2013. Revenues increased by 19.2% between 2010 and 2011 and an additional 33.9% between 2011 and 2012. These figures do not include any values from Noble or Monroe counties which did not have a lodging tax in that time period.

Sales Tax:

Within the region, sales tax receipts increased from $30.9M in 2010 to $48.1 M in 2014. Annual increases were 5% from 2010 to 2011, 11% from 2011 to 2012, 12% from 2012 to 2013, and 19% from 2013 to 2014. Belmont increased by 56% between 2010 and 2014, Guernsey by 68%, Monroe by 105%, Morgan by 40%, Noble by 141% and Washington by 32%. The largest dollar increase was in Belmont County from $11.3M to $17.7 M. In Noble County, sales tax receipts increased by 0% between 2010 and 2011, 21% between 2011 and 2012, 56% between 2012 and 2013 and 29% between 2013 and 2014. Dollar increase in Noble County was from $1.1M in 2010 to $2.7M in 2014.

Noble County General Fund:

The general fund balance in Noble County increased from $3.5M in 2010 to $5.8M in 2014. By year, the increase was 7% between 2010 and 2011, a decline of 3% between 2011 and 2012, an increase of 26% between 2012 and 2013 and an increase of 27% between 2013 and 2014.

Noble County Recorder’s Fees:

Recorder’s office receipts as well as sales tax receipts are component parts of the general fund. Recorder’s receipts increased from $4,944 in 2010 to $397,160 in 2014. Annually receipts increased by 3,054% between 2010 and 2011, by 126% between 2011 and 2012, declined by 3% between 2012 and 2013 and increased again by 16% between 2013 and 2014.

Banking Deposits in Noble County:

In addition to these government receipts, banking deposit activity in Noble County was also robust in this time period. Deposits in the county increased from $151M in 2010 to $226M in 2014. Annual increases were 3% between 2010 and 2011, 19% between 2012 and 2013, 19% again between 2012 and 2013 and 3% from 2013 to 2014.

Note: Mike will be retiring from OSU Extension on June 30. The impact of his work in Noble County and throughout Ohio has been significant. Extension is pleased that the Noble County Commissioners have continued the partnership and funded the position that will enable this high-value work to continue.

Eastern Ohioans have always been generous. Disaster or illness strikes, we give generously of our time and resources. But the concept of organized philanthropy strikes many residents in this part of the state as foreign . . . something that the Rockefellers or Bill Gates do . . . but not us!!

Historically, southeastern Ohio which includes 26 of the 32 Ohio Appalachian counties has been underrepresented in charitable assets. This region represents 29.5 percent of the state’s counties, 10.5 percent of the state’s population, but only 2.5 percent of the charitable assets and 2.7 percent of giving in the state. For illustration, Ohio’s largest community foundation, The Cleveland Foundation, had approximately 4.8 times the assets and made about 2.6 times the gifts of all 132 foundations in southeast Ohio combined.

Oil and gas development in the region may be a catalyst for the growth of organized giving in this part of the state where shale development is occurring. New community foundation funds have been established in Harrison and Monroe Counties, and the Guernsey County family of funds all have been consolidated under the umbrella of the Foundation for Appalachian Ohio. In Noble County, a local community fund, under the Marietta Community Foundation umbrella, has distributed nearly $15,000 in grants to local non-profits and $7,000 in scholarships since its creation in 2005.

These “baby-steps” in some of Ohio’s smallest counties are long overdue and represent a positive sign in the region. The creation and maintenance of these local funds provide a seed from which long term growth in charitable giving may result. Hopefully some small portion of the region’s new found oil and gas wealth will make its way into these funds to assure that the current gas wealth will help the region thrive for years to come.

How do we inform community planning for the impacts related to the shale play in eastern Ohio? One approach is to track key indicator data.

Extension researchers recently shared the highlights of an advanced cluster analysis focused on manufacturing with community development officials in four EDD’s (economic development districts) within the eastern Ohio shale play. The cluster analysis is one of four analytical steps being conducted as part of an EDA (Economic Development Administration) funded project to inform the overall 25-county region about economic, social and environmental changes, potential implications and strategic directions for sustainable development.

Changes are being tracked quarterly or annually depending on what is being measured using a number of data sets including the Center for Human Resource Research’s enterprise and workforce database and IMPLAN, an economic modeling software program. Social and environmental indicators are also being tracked including school enrollment, housing starts, crime and water quality, using a wide variety of public and private data sources.

The cluster analysis revealed both expected and unexpected trends occurring in the four EDD’s. As anticipated, in the region experiencing the majority of the drilling activity, the vast majority of the 600 or so jobs created between 2010-2013 were in the core and ancillary industries related to shale development. During the same period, the Buckeye Hills-Hocking Valley Regional Development District in the southern-most part of the 25-county region saw a concentration of hiring activity occurring primarily in construction tied to housing and commercial development, most likely due to shale development. Unexpectedly, relatively little or no jobs were created in core or ancillary shale industries in this district.

I am an environmental economist – but what does that mean? When people ask me what I do for a living I tell them I am an environmental economist with Ohio State University Extension. In response, I get a lot of intense reactions generally involving a combination of: (a) that sounds impressive! and (b) what does an environmental economist do? Whether it is impressive is a matter of one’s perspective and is subject to debate at another time and place, so let’s instead go over what environmental economics is all about.

Name any environmental topic you have ever thought of or read about. There’s recycling, global climate change, pollution, preservation of sensitive lands, fracking, water quality, endangered species; the list goes on and on. Now consider that any time you discuss one of these topics or read about any of them, you might initially focus on some of the technical, physical or biological issues at the center, but it will not take very long before you begin to address the economic dimension. It is simply unavoidable. Try it and see.

These days in many eastern Ohio communities, new extraction technologies – hydraulic fracturing or “fracking” as it is frequently called – are opening underground resources that were not available previously. This growth and development is creating new jobs and opportunities for business development. It is also raising concerns involving traffic, housing, health care, education and social services, for example.

To help community leaders make informed decisions and develop long-range plans that will address and balance economic, social and environmental impacts of this new wave of development, OSU Extension CD has put together a broad team of researchers and community development professionals to provide needed data, information and guidance. Read more here.

Oil and gas production dates back to the 1800s in eastern Ohio, where thousands of wells have been drilled into shallow sandstone deposits and other formations. Since 2010, however, energy resource development in Ohio has been on a scale far exceeding that of the previous 100 years. The impact on farmers and other rural landowners has been substantial, including payments of hundreds of thousands of dollars for many who have leased their subsurface resources. Local communities and governments have experienced change as well . . . read complete article.

Find the series of SERC Notes on the Subsurface Energy Resource Center (SERC) Web site.

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